Selling products by replicating the logos
and packaging to make it look very similar to those ofinternational giants is a
theft of goodwill earned by them and a deception to consumers.
By: Sujan Raja
Shrestha
While travelling back to
Kathmandu from Pokhara, I made a pit stop to get refreshed and bought a bottle
of Coke from a store. Since I was in a
hurry I didn’t check the bottle and rushed back to my car. I took a sip and
immediately noticed a difference in taste. I looked down at the bottle and read
“Club-Cola” instead of the “Cola-Cola” I had asked the shopkeeper for. The
packaging, logo and the shape of the bottle looked deceivingly similar to the
one of the original Coke. Instantly I felt cheated so I turned around and went
back to the same shop for an exchange. The shopkeeper denied the exchange
arguing that the bottle had already been opened! And there I was standing
helpless with a counterfeit Coke bottle which neither had any quality assurance
nor the taste I loved. Clearly, the retailer
was not bothered by selling counterfeit products and maybe he was getting more
profit margins(though the consumer price was same as that of an original Coke).
I am always fully supportive
of Nepali domestic brands emerging in the market and making the country more
self sufficient. But I don't think we should support when domestic brands come
up with products that are literally the replications of the name, packaging,
color and logo of well-established international brands. I don't think it is
fair that they are selling copied products by making it look like an original
while deceiving customers. This simply implies that many Nepali brands that are
infringing trademarks, are taking advantages of the market position,
marketing efforts and the goodwill created by well known brands and also
tricking consumers; thinking that they are saving costs on marketing by taking
advantage of the millions spent by the international brands on advertising.
Both our country and the
neighboring countries are not to shy away from copying trademarks of
international brands like Nike, Center Fresh, Coca-Cola, KFC and so on. We have
a fast-food chain named “KKFC” very similar to the American fast food chain KFC
which ventured into Nepal a few years back, or Nepali brand “CenterFillz” which
is similar to Centre Fresh. Knock offs of apparels like Nike, Under Amour, and
Adidas have been flooding the market here for decades.
Retailers that are selling
counterfeit products are somewhat accountable for creating confusion and
deceiving consumers. This will definitely have an adverse affect on long term
sales and consumer loyalty to the shop as a vigilant consumer who has realized
the sales of duped products most probably will hesitate to return to the shop
as a result of the store’s unreliability. Additionally, such retailers are
always in risk because of the uncertainty of their stock fulfillment and
reimbursements of unsold stock in the future. Because of course, these counterfeit
brands may or maybe reliable on their business.
So do we think that the counterfeit
manufacturers are profited by copying others? In the short run, yes, they may
benefit with instant sales by deceiving consumers, duping the reputation and
name of original brands. However, on the long run, they have failed to create
their own identity; they will always be known as the “copy cat”. Instead, if
manufacturers put in their own thought and innovation to the industry and
create a brand distinct of its own, it would be a win for the long run and will
also help them gain brand loyalty from the country. Innovative domestic brand
definitely gains the “National Pride” of the country. I can proudly say Wai Wai
is our national pride but can never imagine myself being proud of brands like ‘Cold-
Cola’, ‘Right’ or ‘Monsoon Dew’, or any other brand in any other category,
which are essentially copy cats.
The concern of consumer
awareness and protection also comes along as many consumers, like me, are not
even aware when they are deceived and handed over a knock off because of the
close resemblance of the products. Look alike products cause more harm to
consumers especially when it comes to Food and Beverage products. The knock
offs might not have the quality standards of an original which can lead to
health and safety hazards to the consumer.
It raises several questions
on the strength of the Intellectual Property and trademark protection laws in
Nepal. Clearly there are loopholes in the existing brand protection laws of our
country which counterfeit manufacturers are taking advantage of. Lack of
responsibility and awareness might also have a role to play here because of
which government officials tend to look the other way instead of imposing
strict actions to such acts. With faulty laws, we can only expect that the
number of trademark infringement cases will multiply more and more in the
future. And if one manufacturer gets away with counterfeiting, it will drive
more people to take advantage of this, resulting in multiplications of
counterfeit practices. For instance, the candy brand Solo had more than 10
copycats like “Solu”, “Silu”, “Sulu” and so on.
With the vast numbers of
copycat brands seen in the market, it seems as though the current legislative
framework is very lenient towards the use of identical logos and packaging of
international brands. This will bring about an environment where there is lack
of innovation, creativity and product modernization in the country. Unfortunately,
such practices have also been a discouraging to Foreign Investments in Nepal.
For instance, in the past, Kansai Nerolac Paints were not able to enter Nepal’s
market to sell their paint as the name had already been used by a Nepali
company. The Japanese company eventually entered Nepal with the brand name KNP
after losing a court battle. It took them several years to win back the brand
name, but it was too late for them as they had already invested in KNP brand
name.
Serving as a brand manager
and after creating many powerful brands for Nepali industry, I have experienced
the tedious process of creating and developing new and innovative brands.
Several level of analysis, thoughts, several research, combinations and
permutations, approval process, risk of launching in the market, time taken to
establish the brand, correcting mistakes and then only a brand can survive and
have an image of its own. It is a product of one’s effort and creativity- a
brainchild. And when someone comes in to steal away your brainchild, it sure is
not pleasant. A brand is not only a name, a sign or a logo, it is a heritage,
it is an investment of some peoples’ whole life. Counterfeiting is stealing
years and years of hardship that a company has endeavored to earn its rightful
marketplace.
According to James Moody,
former chief of the FBI organized crime division, counterfeiting will be the
crime of the 21st century (Wilcox et. al., 2009). Counterfeiting is a growing
problem and between the years 2000 and 2006 the amount of seized goods has increased
with 273 percent (European Commission, EC, 2007) and it accounts between 5-7 %
of the total world trade (ICC Commercial Crime Services, 2012-01-31).
Counterfeits damages the consumer’s perception of the product as consumers are
not buying quality products manufactured by the company thereby affecting the
brand's reputation. Counterfeit products are so identical in look and feel to
genuine parts that it is getting harder to distinguish them visually and
customers do not know the difference.
With many look alike brands,
the concept of consumerism is spoilt in Nepal. The consumers of Nepal have been
deprived and deceived of quality standards of products and services with the
increase in copycat domestic brands that are pushing products with logos and
packaging of international giants. It is very important to encourage businesses
and entrepreneurs to strive for originality and create innovative ideas. And
for this, the legislation of the country will have to build much stricter
measures in protecting Trademarks and Intellectual Property. Brand protection
laws will definitely be an encouragement to new innovative ideas and boost entrepreneurship
and market leaders (rather than copy cats) amongst us and also have a welcoming
environment for more FDIs in the country.
As an attempt to tackle
counterfeit activities, the government should take strict action against the
theft of trademarks and intellectual properties while encouraging innovation
and product modernization by providing subsidies and rewards to innovators and
market leaders. Let there be repercussions for bad deeds and rewards for good
deeds. On the other hand, consumers should be aware of dupes in the market and
practice their rights by being vocal with their grievances whenever they
experience injustice. Consumers have the right to ask for authentic brands in
exchange of their hard earned money or even file complaints to legal bodies. They
have the right to ask for refunds or returns whenever they are tricked in their
purchase. Whereas for manufacturers who have the intention of counterfeiting
should reflect their ethical values and readjust themselves to do better than
to ditto copy someone else’s creativity. We are allowed to be inspired by
successful brands but making a ditto copy of an established product and
deceiving buyers is an unethical act of theft. The same ethical question goes
to retailers as well whose duty is to provide authentic products to buyers
without any deception.
New industrialists and brand
owners will have to realize the fact that our own brand names and native style
packaging can win much bigger brand strength and can win hearts of the people.
Some brands like Rakura tea, Mero Mobile, Goldstar Shoes, Gorkha Beer,
Arghakhanchi Cement are classic examples of local heroes in the market. The
regulators must encourage such practices and provide incentives to those who
promote local brands and local names. We have to evolve in our market as
innovators and should focus on creating our own identity. Yes, the copycat
mentality can give short term gain, but it is definitely not a long-term
strategy. Let the innovators rule the market, let the international brands see
this market as a safe playing ground then only our consumers will benefit and
will receive good quality products with open arms. It is high time that we stop
leveraging on others' popularity to make quick bucks. When globally all
marketers are becoming innovative by the day, we must discourage the practice
of promoting look alike products and encourage innovators to create brands that
give pride to the nation.
European
Commission, EC
(2007), Summary of Community Customs
Activity on Counterfeit and Piracy [Electronic] Brussels, European
Commission, Taxation and Customs Union Available:
http://ec.europa.eu/taxation_customs/resources/documents/customs/customs_controls/coun
terfeit_piracy/statistics2007.pdf [2012-02-20].
ICC
Commercial Crime Services (2012-01-31) "Counterfeiting Intelligence Bureau".
http://www.icc-ccs.org/home/cib [2012-02-15].
Wilcox, K., Kim, H., Sen, S. (2009), “Why do Consumers buy Counterfeit Luxury Brands?”, Journal of Marketing Research, Vol. 46, Issue 2, pp. 247-259.
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